Long-Term Care, Altruism and Socialization
AbstractThe public provision of long-term care (LTC) can replace family-provided LTC when adults are not sufficiently altruistic towards their elderly parents. But State intervention can also modify the transmission of values and reduce the long-run prevalence of family altruism in the population. That evolutionary effect questions the desirability of the LTC public provision. To characterize the optimal LTC policy, we develop a three-period OLG model where the population is divided into altruistic and non-altruistic agents, and where the transmission of (non) altruism takes place through a socialization process à la Bisin and Verdier (2001). The optimal short-run and long-run LTC policies are shown to differ, to an extent varying with the particular socialization mechanism at work.
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Date of creation: Sep 2011
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long-term care ; altruism ; socialization ; optimal policy ; crowding out effect;
Other versions of this item:
- NEP-AGE-2011-09-22 (Economics of Ageing)
- NEP-ALL-2011-09-22 (All new papers)
- NEP-CBE-2011-09-22 (Cognitive & Behavioural Economics)
- NEP-DGE-2011-09-22 (Dynamic General Equilibrium)
- NEP-HEA-2011-09-22 (Health Economics)
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